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How on earth is a windfall tax supposed to reduce inflation? Adding taxes makes goods/services more expensive. You would be removing the incentive to produce m

by rank0 4y ago

How on earth is a windfall tax supposed to reduce inflation? Adding taxes makes goods/services more expensive. You would be removing the incentive to produce more oil. Why would an energy company invest enormous amounts of time and capital to increase production and refining capacity if the government seizes their profits? Nobody enjoys producing oil. Profit is the only motivation to perform such a difficult/unpleasant task.

jmyeet 4y ago
> How on earth is a windfall tax supposed to reduce inflation? Adding taxes makes goods/services more expensive. Because a lot of price hikes haven't been because of inflation. They've exceeded inflation. Another word for that is "profiteering" (or "price gouging"). It's the reason why it's typically iellgal to profiteer off of a natural disaster, for example. Put another way: Exxon, Chevron, etc are raising prices not because costs have increased but because they can. The record profits they've all recently announce bear that out. So a windfall tax does a similar thing to increasing interest rates: it's a form of wealth redistribution. Raising interest rates diverts money to banks and investors. Taxation diverts money from corporate profits to the government who can then use that money for the people who are most vulnerable because of, say, the skyrocketing cost of gas and rent.
- rank0 4y ago
  > Because a lot of price hikes haven't been because of inflation. They've exceeded inflation. Another word for that is "profiteering" (or "price gouging"). It's the reason why it's typically iellgal to profiteer off of a natural disaster, for example. > Put another way: Exxon, Chevron, etc are raising prices not because costs have increased but because they can. The record profits they've all recently announce bear that out. This doesn't make any sense. It's purely a supply/demand issue. Oil is potentially the most liquid commodity in the world. If someone wants to price gauge, your competitors will sell for less. We haven't built a new refinery in the US since ~1979. The oil producers are basically maxed out on refining capacity and trust me, those guys want to sell as much oil as possible. They made record profits because there's a shortage of a critical resource and tons of demand. The way to fix this is by increasing production capacity. If you've made it more expensive to expand production, it should be obvious that you cannot expand. > Taxation diverts money from corporate profits to the government who can then use that money for the people who are most vulnerable because of, say, the skyrocketing cost of gas and rent. The ~30T deficit says otherwise. Our interest payments on that debt alone is ~$400B annually and will only grow. That's over HALF our military budget in interest payments. The government has done a terrible job of managing money. Inflation comes from government spending. Look at the Fed's balance sheet! If you double the amount of dollars, but there's the same number of goods/services...you would think dollars would be worth less.

by rank0 4y ago

jmyeet 4y ago

> How on earth is a windfall tax supposed to reduce inflation? Adding taxes makes goods/services more expensive. Because a lot of price hikes haven't been because of inflation. They've exceeded inflation. Another word for that is "profiteering" (or "price gouging"). It's the reason why it's typically iellgal to profiteer off of a natural disaster, for example. Put another way: Exxon, Chevron, etc are raising prices not because costs have increased but because they can. The record profits they've all recently announce bear that out. So a windfall tax does a similar thing to increasing interest rates: it's a form of wealth redistribution. Raising interest rates diverts money to banks and investors. Taxation diverts money from corporate profits to the government who can then use that money for the people who are most vulnerable because of, say, the skyrocketing cost of gas and rent.

rank0 4y ago
> Because a lot of price hikes haven't been because of inflation. They've exceeded inflation. Another word for that is "profiteering" (or "price gouging"). It's the reason why it's typically iellgal to profiteer off of a natural disaster, for example. > Put another way: Exxon, Chevron, etc are raising prices not because costs have increased but because they can. The record profits they've all recently announce bear that out. This doesn't make any sense. It's purely a supply/demand issue. Oil is potentially the most liquid commodity in the world. If someone wants to price gauge, your competitors will sell for less. We haven't built a new refinery in the US since ~1979. The oil producers are basically maxed out on refining capacity and trust me, those guys want to sell as much oil as possible. They made record profits because there's a shortage of a critical resource and tons of demand. The way to fix this is by increasing production capacity. If you've made it more expensive to expand production, it should be obvious that you cannot expand. > Taxation diverts money from corporate profits to the government who can then use that money for the people who are most vulnerable because of, say, the skyrocketing cost of gas and rent. The ~30T deficit says otherwise. Our interest payments on that debt alone is ~$400B annually and will only grow. That's over HALF our military budget in interest payments. The government has done a terrible job of managing money. Inflation comes from government spending. Look at the Fed's balance sheet! If you double the amount of dollars, but there's the same number of goods/services...you would think dollars would be worth less.